The Case Against Traditional Indexes

October 19, 2016

Are market cap-weighted indexes like the S&P 500 the best way for passive investors to get optimal results? Maybe not, says The Wall Street Journal.

While indexes built like the S&P are an inexpensive way to target market segments, they have shortcomings that investors may not perceive. Their weighting approach means that they own, by definition, “more of what just went up and less of what just went down,” the Journal...